The legal action against Activision Blizzard began in July 2021, when the California Department of Fair Employment and Housing (DFEH) claimed that the gaming giant was guilty of enabling a "frat boy" work culture that had led to sexual misconduct and misogyny. Since the DFEH initially brought its lawsuit forward, the case against Activision Blizzard has seen many key developments. As the company is so large and multiple other cases have begun as a result of the initial lawsuit, news drops every so often about legal action against the publisher.Outside of the courtroom, Activision Blizzard has stayed in the news. Calls for Activision CEO Bobby Kotick to resign have been increasing ever since the allegations were first heard, and Microsoft has since sought to acquire the Call of Duty publisher for around $70 billion. One thing that has suffered due to the allegations around Activision Blizzard is the company's worth, which angered investors to such a point that they also sought to sue the publisher, claiming that the company misled them about the investigations into its workplace culture.The investor lawsuit alleges that Activision Blizzard knew what the results of the DFEH's investigation would be and that the company should have warned them about the potential fallout. A recent court ruling has found that this claim is an example of "fraud by hindsight," which is a legal term where companies that suffer turns for the worse are accused by their investors of being able to predict these bad outcomes, basically claiming that a company could have predicted the future if it so wished.
Judge Percy Anderson of the US District Court of the Central District of California stated that the investigations made by the DFEH were in no way "ordinary or routine" and that the investors claims relied too heavily on "temporal facts" that were "insufficient to support a claim of securities fraud." These statements led to the investors' case against Activision Blizzard being dismissed, essentially ruling that it was unfair to expect the publisher to make predictions about the outcomes of irregular investigations. The results of the investigations are still seeing the company make some large payouts, and recently it was ruled that Activision Blizzard would pay an $18 million settlement to the US Equal Employment Opportunity Commission.
Activision Blizzard is still being watched closely by its employees, and even US Senators are observing the company's potential acquisition by Microsoft. Members of the US Senate wrote a letter of concern about the deal between the two tech giants, believing that Microsoft's acquisition could lead to the sexual misconduct accusations against Activision Blizzard being swept under the rug. There are also concerns around Bobby Kotick, who could receive a large payout following the acquisition.
Source: Bloomberg Law